38 Optimizing Human Capital
People on Projects 39
Once the initiative is in place and the projects that fall under it are gearing up, the executive staff has minimal involvement in day-to-day project activities. However, although the executive team is not performing the day-to-day detailed work, it must be involved as an executive oversight team (or Steering Committee). Ideally, management must understand the strategic implications of the Strategic Project Office initiative and its impact on the company’s bottom line in terms of more rapid new product development and the resulting increased return to shareholders.
Where Executives Fail
The dilemma that arises in most organizations is that the impetus toward improved project management begins at the middle management level.
And because middle management tries to implement changes that are really beyond its scope of influence, the project management initiative usually receives inadequate funding. Middle management usually only receives enough support to cobble something together — if they do not get tied up with other things. Without executive management sponsor- ing/driving/overseeing this important organizational change project, a project management initiative does not deliver the promised value — not because the initiative itself was not a sound idea, but because the imple- mentation is half-hearted. Without the backing of executive management, project office resources typically find themselves implementing the project office initiative as a part-time role, are periodically pulled from deployment efforts to manage current “hot” projects, and find themselves juggling multiple priorities — many times defocused to the point that the project office initiative loses its direction and momentum.
These are typical of the problems we see in companies that have tried and failed to implement better project management practice. Front-line or middle management might see the need for process improvement, but given their immediate pressures and responsibilities, it is almost impossible for them to rise above the tactical level to focus on the strategic level.
Make no mistake: deploying and sustaining a corporate-level Project Office is a strategic program. So management has a critical role to play.
How To Succeed
What are the critical elements of successful management participation in a Strategic Project Office deployment? There are many, including the strategic decision making that supports the pr oject, protecting the resources in the SPO so that they can focus on what they need to do;
supporting the budget, supporting the plan, supporting the schedule, and
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providing conflict resolution when resistance to change arises within the departments most affected by the deployment. However, the keystone in the EPO deployment strategy is the Executive Sponsor. The Executive Sponsor paves the way for the EPO deployment by dealing with other executives as a peer when conflicts over resources arise. Without an Executive Sponsor as an initiative champion, the chances of successfully deploying a Strategic Project Office are very slim.
Identifying the Executive Sponsor
The project sponsor is the executive in charge of the area in which most of the business functions connected with the project reside. He or she initiates the project and is a member of the Oversight Committee. The sponsor makes business decisions at the various project phases, commu- nicates the larger vision of the project throughout the organization, and, from the customer’s (the executive leadership team, in this case) point of view, is ultimately responsible for the project’s completion. Project spon- sorship is most effective when accountability resides with one person, a person high enough in the organization that he or she has enterprisewide influence. There will of course be a project sponsor for every project undertaken by the company, but the sponsor chosen to spearhead the Project Office initiative will have a particularly important role in leading organizational and cultural change; thus, the sponsor of the Project Office initiative must be highly placed.
In our experience, in a mid-sized organization or within a business unit of a larger organization, the Executive Sponsor would typically be at the vice-president level. A simple rule of thumb for choosing a person with sufficient authority is simply this: does he or she have the authority to cancel the project management change initiative? Lack of an Executive Sponsor with sufficient authority is a major risk to the success of the initiative, and we recommend that work not proceed until one engages an effective project office sponsor. This step should take place early in the initiative to ensure that the project will move forward. Securing buy- in across the executive positions in an organization will significantly improve the probability of project office success, giving the project team the ability to resolve the kinds of issues, conflicts, and challenges that occur whenever one tries to deploy an organization-wide system of this magnitude.
Integration of multiple financial systems, coordination among the var- ious organizations, compiling the resulting data, and generating appropri- ate tailored reporting only begins to reflect the complexity of the integration challenges surrounding the myriad of changes that an SPO
People on Projects 41
deployment entails. Multiply this example by the issues raised by the additional issues faced by a developing Project Office — coordination of the project/program/organizational budgeting processes, procurement, inventory control, capital equipment funding and allocation, and sup- pliers — and we find there is a tremendous amount of coordination and systems integration required for a fully functioning Strategic Pr oject Office. To expedite these integration issues, the Executive Sponsor must be a champion for the SPO, while serving as an effective organizational facilitator. Being seen as a proponent of this process change for the good of the organization as a whole allows the Sponsor to pave the way to work through some of the sticky issues of tur f, information- sharing, and power.
It is tempting for executives to hand over these kinds of sticky issues to a project manager selected to lead the Project Office initiative. But the project manager, as a middle-management level manager, most likely will not have the influence, authority, or reputation to work through the toughest challenges of integration. Also, it is likely he or she will run into a political roadblock, or the department he or she is negotiating with has other issues that it views as more of a crisis and the SPO integration problem is put on the back burner until “later.” If integration unveils some areas of duplication or inefficiencies between departments — as is likely to happen — the project manager as the bearer of bad news is likely to be subjected to that time-honored management technique of “shooting the messenger.” The value of a higher-level executive sponsor is that he or she can help adjust priorities relevant to the priorities of the overall organization. He or she can cut through some of the political challenges that a mid-level Project Office “project manager” will have extreme diffi- culty in achieving.
The Bottom Line
Choose a sponsor for the SPO who can communicate the plan and keep the organization’s priorities straight. He or she must be a strong advocate for the changes involved, extremely knowledgeable about the benefits of project management, and have the ear and confidence of the powers that be. The old saying goes, “You’re never a prophet in your own land.” If senior management does not fully understand and support the project management approach, it might be time to bring in an external consultant who has dealt with a number of companies in your market segment to explain and execute the advantages of project management and the results achieved by others who have successfully implemented a Pr oject Office.18,19
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More Management Participation: The Project Office Steering Committee
As the liaison between senior corporate management and the SPO project team, the Executive Sponsor should be the chair of the Project Office Steering Committee. This committee is normally composed of the director of the SPO; the Project Sponsor; the heads of key functional organizations (members of business units affected by the project or projects being dealt with at any one time); and a senior corporate official, such as the CEO or COO. It should consist of three to seven individuals in total. This committee is formed to change the corporate project culture and is active on a continuing basis to select, prioritize, and evaluate the entire corporate portfolio of projects. In addition, it acts specifically on very large projects having overall corporate impact, such as the SPO initiative. When major issues or problems with the project must be escalated, the Project Office Steering Committee provides a forum for issue/problem resolution. This committee initiates the project in a management oversight role, and also continues to hold end-of-phase reviews throughout the duration of the deployment project, monitoring progress against the objectives to deter- mine whether or not the SPO is meeting the objectives that were estab- lished at initiation. The Project Office Steering Committee may also discover the need to include technical and internal client representatives
— senior staff from other business units that might be affected by the SPO deployment. If there are external customers who are critically affected, one may want to include them on this committee as well. This group is, in effect, the board of directors for the SPO and other mega-projects.
As a “board of directors,” the Project Office Steering Committee has input into the strategic direction and will play a part in the review of the SPO charter. In some cases, members of the committee will need to sign off on key elements of the deployment plan (such as the project charter) because the charter defines the scope of the proposed SPO and its specific roles and responsibilities with respect to functional departments and business units. While the SPO Project Office Director will write the initial draft of the charter for the Project Office Steering Committee meeting, he or she will ask committee members to sign the charter to verify that its provisions have been agreed to. If a conflict arises in the future, the members of the committee will revisit originally agreed-upon terms of scope, priorities, and strategy prior to initiating change. The Project Office Steering Committee will also continue to revisit the goals and objectives of the SPO, as well as the critical deliverables, and continue to work within the organization to achieve executive buy-in to all those areas.
The Project Office Steering Committee is also involved in the commit- ment of all the various resources that the SPO deployment will require, from budget and personnel, to space, equipment, and time.
People on Projects 43
In the early stages of an SPO deployment, the Project Office Steering Committee will be required to meet more frequently, perhaps as often as monthly. As the project begins to deploy, the committee will meet less often. As part of project planning, the Project Office Steering Committee may wish to identify key end-of-phase points when it will come together to review progress to date, determine whether the objectives of that phase have been achieved, whether the schedule has been maintained, whether proper cost controls have been put into place, etc. Another way executive management can make sure that Project Office Steering Committee rep- resentatives fully appreciate the importance of the project is to ensure that committee members devote sufficient time to committee proceedings;
that they in fact attend meetings and provide meaningful input, and provide feedback to senior executives on progress and problems. It may be necessary to conduct a session of executive-level training in project management before the SPO deployment project is launched to ensure that the Project Office Steering Committee fully understands its role, responsibilities, commitments, and value.
Functional managers seldom have a sufficient grasp of the enterprise advantages of project management to fully appreciate “what all the fuss is about.” The members of the Project Office Steering Committee must understand enough about the project management process and its value to be strong advocates; and they must also have a high-level understanding of the phases and processes of the discipline in order to provide leadership and guidance during project reviews.
Periodic progress reviews are a normal part of the “controlling” pro- cesses of project management. On the SPO deployment project, as on any other organizational project, executive participation will be necessary in these project reviews. These reviews will be scheduled into the imple- mentation plan. One reason executive involvement is important in these reviews is that the Project Office Steering Committee must have the authority to both launch and cancel the project if necessary. Otherwise, the Committee will not have sufficient authority to make other critical decisions necessary for the successful outcome of the project. Project control is all about identifying problems, risks, or issues early in the deployment initiative, and then addressing them as a project moves through its life cycle of planning, deployment, and transition to ongoing operations.
Keep in mind, however, that the Project Office Steering Committee must be aware of the highlights of the program only: a very high-level roll-up of all the project activity. The SPO project manager should also provide the committee with an agenda and a menu of decisions that must be made during the Project Office Steering Committee meetings. Some of the typical issues this committee will be asked to address include major
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changes in the direction of the Strategic Project Office deployment project or other significant change control items, budgetary impacts, resource con- flicts, need for involvement from other organizations, or lack of support from a critical “power center” in the organization. A simple word from the CEO or COO to a recalcitrant player is sometimes all that is needed to get the Project Office deployment back on track. All the issues the project team itself is not able to resolve should be elevated to the Project Office Steering Committee so that the committee can use its influence or decision-making ability to redirect, correct, provide funding or resources, reprioritize, or take other action. And, as always, it is necessary to document committee decisions and incorporate them into an updated plan or issues log.
Finally, one of the most important areas in which the Project Office Steering Committee plays a role is in the realm of culture change. As discussed in Chapter 1, managing by projects is an entirely new way of doing business in many organizations and anyone attempting to align projects and strategy will impact not only those individuals doing project management, but also functional teams and managers, and systems from HR to payroll to facilities to procurement to finance. Changes of this magnitude cannot take place without management support and advocacy, and this will be a primary role for the Project Office Steering Committee.
It has been said that much of implementing pr oject management is
“missionary work,” and the executives involved must be the primary
“missionaries” of this new business doctrine. Table 2.1 shows a set of Steering Committee guidelines adapted from the practices of the Australian government.20 Table 2.2 offers suggestions for basic project management training for Steering Committee executives.
The Expanding Role of the Stakeholder
Because key stakeholders form the backbone of a Steering Committee, it is worth noting that, recently, several authors and experts have suggested a broader view of and role for stakeholders.
What the Gurus Say
Project management is unique among business approaches in the attention it lavishes on stakeholders; and according to some business thinkers, this feature of the discipline makes it a kind of model for how business will be carried out in the future. Ann Svendsen details recent research showing that when companies treat their employees well, create jobs in the local economy, develop innovative products and services, take care of the environment, and contribute to the community, they are often more
People on Projects 45
TABLE 2.1 What the Steering Committee Does A Steering Committee’s role is to:
Take on responsibility for the project’s feasibility, business plan, and achievement of outcomes.
Ensure the project’s scope aligns with the agreed requirements of the Business Owners and key stakeholder groups.
Provide those directly involved in the project with guidance on project business issues.
Ensure effort and expenditure are appropriate to stakeholder expectations.
Ensure that strategies to address potential threats to the project’s success have been identified, costed, and approved, and that the threats are regularly reassessed.
Address any issue that has major implications for the project.
Keep the project scope under control as emergent issues force changes to be considered.
Reconcile differences in opinion and approach, and resolve disputes arising from them.
Report on project progress to those responsible at a high level.
Depending on the nature of the project, take on responsibility for progressing any corporate or strategic issues associated with the project.
What role do individual members perform?
Individual Steering Committee members are not directly responsible for managing Project Office activities, but provide support and guidance for those who do. Thus, individually, Steering Committee members should:
Understand the strategic implications and outcomes of initiatives being pursued through project outputs; appreciate the significance of the project for some or all major stakeholders and perhaps represent their interests.
Be genuinely interested in the initiative and the outcomes being pursued in the project.
Be an advocate for the project’s outcomes by being committed to and actively involved in pursuing the project’s outcomes.
Have a broad understanding of project management issues and the approach being adopted.
In practice, this means they:
Ensure the Project Office’s outputs meet the requirements of the key stakeholders.
Help balance conflicting priorities and resources.
Provide guidance to the project team and users of the project’s outputs.
Consider ideas and issues raised.
Foster positive communication outside the Committee regarding the progress and outcomes.
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profitable.21 Attention to the relationships between and among all the people, both within and external to a business organization’s activities, not only minimizes conflict today, but also builds a fund of goodwill that can mitigate the potential for future problems. In a crowded global marketplace, with scarce talent and hair-trigger litigation, such relationship- based thinking becomes less and less of a luxury.
Svendsen’s insights are confirmed by Steven F. Walker and Jeffrey W.
Marr. In their book, companies are urged to build commitment and loyalty by developing ethical core values and practices for dealing with their
TABLE 2.1 (continued) What the Steering Committee Does
As members are selected based on their individual knowledge and skills that they bring to the Committee, there can be some confusion and conflict in the accountability of members. The first responsibility of members is the achievement of Project Office success and second to their business area.
Similarly, members who have expertise in a particular area should avoid taking a narrow view of their responsibility.
What happens before each meeting?
At least five working days before each scheduled meeting, you should receive:
An agenda
Minutes of the last meeting, including an action list
A progress report on the status of the project since the last meeting prepared by the project manager
Other documents to consider at the meeting (if any) What happens during each meeting?
The Executive Sponsor usually chairs the meetings. The chair will conduct the meeting according to the agenda, ensuring that all members are encouraged to provide input throughout the meeting and that any decisions or recommendations are adequately resolved and confirmed by the members. A basic agenda would include:
Confirmation of minutes from previous meeting
Reviewing the status of action items from previous meeting
Report on the status of key projects by the Strategic Project Office Director or CPO
Discussion on other documents to be considered (if any) Confirmation of date, time, and venue for next meeting
Within a week of the meeting, a copy of the minutes of the meeting should be circulated to all members.
Source: Adapted from the Tasmanian Governmental Project Management Guidelines, accessed at http://www.projectmanagement.tas.gov.au/res_kits/pm_
scresourcekit.htm.